Income Tax (Earnings and Pensions) Act 2003

Disqualifying events for purposes of paragraph 83 U.K.

84 (1) The following are disqualifying events for the purposes of paragraph 83— U.K.

(a) a contravention in relation to the operation of the plan of any of the requirements of this Schedule, the plan itself or the plan trust;

(b) an alteration being made in a key feature of the plan, or in the terms of the plan trust, without the approval of the Inland Revenue;

(c) if the plan provides for performance allowances in accordance with paragraph 42 (method two), the setting of performance targets in respect of an award of shares which are not consistent targets (within the meaning given by paragraph 42(6));

(d) an alteration being made in the share capital of the company whose shares are the subject of the plan, or in the rights attaching to any shares of that company, that materially affects the value of participants' plan shares;

(e) shares of a class of which shares have been awarded to participants receiving different treatment in any respect from the other shares of that class;

(f) the trustees failing to furnish any information which they are required to furnish under paragraph 93 (power to require information);

(g) the company, or (in the case of a group plan) a company which is or has been a constituent company, failing to furnish any information which it is required to furnish under that paragraph.

(2) For the purposes of sub-paragraph (1)(b) the Inland Revenue may not withhold their approval unless it appears to them at the time in question that the plan as proposed to be altered would not then be approved on an application under paragraph 81.

(3) Sub-paragraph (1)(e) applies, in particular, to different treatment in respect of—

(a) the dividend payable,

(b) repayment,

(c) the restrictions attaching to the shares, or

(d) any offer of substituted or additional shares, securities or rights of any description in respect of the shares.

(4) Sub-paragraph (1)(e) does not, however, apply where the difference in treatment arises—

(a) from a key feature of the plan, or

(b) from any of the participants' shares being subject to any provision for forfeiture.

(5) Nor does it apply as a result only of the fact that shares which have been newly issued receive, in respect of dividends payable with respect to a period beginning before the date on which they were issued, treatment less favourable than that accorded to shares issued before that date.

(6) For the purposes of this paragraph a “key feature” of a plan is a provision of the plan that is necessary in order to meet the requirements of this Schedule.